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N5 Sources of Finance and Advice

Total questions: 42

Worksheet time: 23mins

Name
Class
Date
1.

A card that borrows money but it has to be paid back with high interest is called a ......

a)

Debit Card

b)

Credit Card

c)

Tesco Card

d)

Pokemon Card

2.
A card that uses money directly from your bank account
a)
Debit Card 
b)
Credit Card 
c)
Pokemon Card 
d)
Baseball Card 
3.
The maximum amount the lender is willing to make available to the borrower.
a)
Credit Limit
b)
Credit History
c)
Creditor
d)
Debit Limit 
4.
An agreement between a borrower and a lender, where the borrower agrees to repay money with interest over time.
a)
Loan 
b)
Interest 
c)
Income 
d)
Deposit  
5.
Sales - Cost of Sales = ???
a)
Money In
b)
Net Profit
c)
Expenses
d)
Gross Profit
6.
Gross Profit - ??? = Net Profit
a)
Expenses
b)
Sales
c)
Cost of Sales
d)
Money Out
7.

Which of the following is NOT a feature of a Government Grant?

a)

Awarded as one off payment

b)

Subject to limitations and restrictions

c)

Repaid in monthly instalments

d)

Must be used for specific purpose

8.

Revenue is ...

a)

Money made from selling products or providing a service

b)

Money paid to suppliers for materials

c)

Expenses x Units produced

d)

Monthly rent payments to landlord

9.
A mortgage is used for ...
a)
Buying a new machine
b)
Buying a new vehicle
c)
Buying land or premises
d)
Paying staff wages
10.
Which source of finance is internal?
a)
Government Grant
b)
Retained Profits
c)
Bank Loan
d)
Overdraft
11.
A ______ can issue shares on the stock exchange to raise finance
a)
PLC
b)
Ltd
c)
Sole Trader
d)
Franchise
12.
Which of the following is NOT a source of finance.
a)
Family & Friends
b)
Bank Loan
c)
Business Devil
d)
Government Grant
13.

A loan that has to be repaid immediately is called an...

a)

Underdraft

b)

Overdraft

c)

Oversight

d)

Undercraft

14.

A loan that is secured on a property is called a....

a)

Mortgage

b)

Overdraft

c)

Credit Card

d)

Government Grant

15.
This type of finance does not need to be repaid.
a)
Bank Loan
b)
Overdraft
c)
Mortgage
d)
Government Grant
16.
A Venture Capitalist / Business Angel specialises in funding risky businesses.
a)
True
b)
False
17.
A mortgage is a long term source of finance.
a)
True
b)
False
18.
A Venture Capital / Business Angel will expect a share of the profits.
a)
True
b)
False
19.
The source of finance that is provided by the Owners is called 
a)
Capital
b)
Overdraft
20.
Which of the following sources of finance does not have interest added.
a)
Overdraft
b)
Owners' Capital
c)
Mortgage
d)
Bank Loan
21.
A business that fails to pay back loans will have
a)
A good credit rating
b)
A poor credit rating
22.

Which term best relate to the definition: 'Money that is used to run the activities of the Business'

a)

Loan

b)

Finance

c)

Grant

d)

Tip

23.

Source of Finance 1: Where can you get money from to start your business? Choose two.

a)

Family and Friends

b)

Banks

c)

Begging

d)

Selling your car.

24.

Choose 2 explanations how 'Family and Friends' can be a good source of fund for your business.

a)

These might be the first people who know you and will invest money in your business if you ask them.

b)

Family and friends tend to be the first point of call when you have to ask for help to fund your business.

c)

Banks will give you anything if you start your business as you do not have anything.

25.

Government funding are called 'Grants'. Why do you think the government will do this? Choose two.

a)

Many governments will offer and give grants to help the entrepreneurs to start and develop their business as this will only help the countries economy.

b)

The government tends to help entrepreneurs to start and develop their business as this will generate work and consolidate the economy.

c)

The government does this to take your business away from you and give it to other big companies.

d)

The government will ask for more money than you were given to increase their profit.

26.

Some people choose to sell what belongs to them which does not directly affect their life so as to start a business. Which term best describe this source of finance.

a)

Bank loans

b)

Sale of assets

c)

Personal savings

d)

Grants

27.

Which of the following best describe 'Finance'?

a)

Customers for a business

b)

Funds for a business

c)

Profits made from the business

28.
Which source of finance is NOT available to ALL types of business organisations?
a)
Selling shares
b)
Selling unwanted assets
c)
Grants
d)
Leasing
29.
Which source of finance is ONLY available to an Ltd or PLC company?
a)
Selling shares
b)
Bank loan
c)
Grants
d)
Retained profits
30.
What is the name for a large amount of money borrowed from a bank to pay for property/premises?
a)
Overdraft
b)
Loan
c)
Mortgage
d)
Debt
31.
Grants - which statement is false?
a)
Grants are only given out if criteria has been met
b)
Grants do not need to be repaid
c)
Grants only have a low rate of interest applied
d)
Grants are mainly issued by local and national Government and the EU
32.
What name is given to the monthly amount of money paid back after a bank loan has been taken out?
a)
Deposit
b)
Withdrawal
c)
Instalment
d)
Standing order
33.
Which source of finance involves getting rid of unwanted items that the company owns?
a)
Sale of liabilities
b)
Sale of assets
c)
Jumble sale
d)
Sale of equity
34.
Name the person who likes to take on risky investments in return for part ownership of the business?
a)
Adventurer
b)
Investor
c)
Donor
d)
Venture Capitalist
35.
Which source of finance is only available to organisations in the public sector?
a)
Grants
b)
Selling shares
c)
Taxes
d)
Hire purchase
36.
What source of finance involves paying a deposit for an asset then making monthly payments, after which you own the asset outright.
a)
Leasing
b)
Renting
c)
Hire purchase
d)
Savings
37.
What is NOT a benefit of leasing?
a)
Can get to use asset quickly
b)
You own it after a certain period of time
c)
Asset is replaced if it becomes obsolete
d)
Do not need to pay out a large sum of money up front
38.
Which is NOT a disadvantages of selling shares to raise finance?
a)
Dividends are paid to shareholders
b)
Ownership is diluted and original shareholders have less control
c)
It is more expensive as interest must be paid
d)
Fees to produce legal share documents can be high
39.
Which source of finance's benefits are that it can be repaid over a long period of time and can be arranged quickly.
a)
Bank loan
b)
Sale of shares
c)
Retained profits
d)
Owner's savings
40.
Which source of finance do most sole traders use at the start of the business?
a)
Own savings
b)
Retained profits
c)
Donors
d)
Debentures
41.
Fill in the blank - a disadvantage of using retained profits as a source of finance is that the money cannot be _____ for something else.
a)
used
b)
deposited
c)
borrowed
d)
controlled
42.
What statement shows the knowledge you need for sources of finance topic at National 5?
a)
description, costs and benefits
b)
Most popular and least popular sources of

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